Roland Berger - COO Insights On Transformation - 2013

COO
INSIGHTS
THE MAGAZINE FOR
CHIEF OPERATING OFFICERS
JANUARY 2013 ISSUE
TRANSFORMATION
DON'T GET STUCK

Everyone knows about Nokia: first rubber boots, then
cell phones. But Bostik? A leading subsidiary
of the French oil and gas company Total, Bostik started
out producing shoe adhesive and now under CEO
Bernard Pinatel has come up with the smart diaper.
What is the true story behind growth through change?
F IGU R E I T OU T
63
%
of managers worldwide
would take a pay
cut in exchange for an
interesting task*
(*See page 6 to find out what that task might be)
Source: Egon Zehnder International
2
COO Insights | 01.2013
E DI TOR I A L
Dear readers,
The great economist and political scientist Joseph Schumpeter summed up his life's work as follows: "Early in life I
had three ambitions. I wanted to be the greatest economist
in the world, the greatest horseman in Austria, and the
best lover in Vienna. Well, I never became the greatest
horseman in Austria."
Schumpeter was quite a man. Born in 1883, he introduced
modern concepts such as "innovation" and "venture
capital" to the business world. He added a fourth factor of
production to land, labor and capital: entrepreneurship.
However, he is perhaps best known for his idea of "creative
destruction". He argued that it is not size that determines
the strength of companies, but their ability to adapt; it
is not readiness to change that makes good managers, but
their determination to actively shape that change.
This issue of COO Insights bears the title "Transformation". We present you with a challenge, but also provide you
with guidance and courage. Courage for what? In the
words of Schumpeter: For the inexhaustible energy of the
"capitalist machine" and the "eternal storm" of economic
change.
Thomas Rinn, Partner
Martin Erharter, Partner
thomas.rinn@rolandberger.com
martin.erharter@rolandberger.com
3
C ON T E N T S
IS SU E 01.2013
TITLE
6
TRANSFORMATION
12
GLOBAL
PERSPECTIVE
Good examples.
Traditional
companies around
the world are
reinventing
themselves on an
ongoing basis
Better now than too late

Transformations are an endurance test for businesses. How can firms
institutionalize change and make it permanent?
16
INTERVIEW
Bernard Pinatel
The Bostik chief on lessons learned from the radical Pegasus cure
14
VOICES
"Let's have a look"
The serious and
less serious things
that famous people
have to say about
change
24
CARVE-OUTS
The art of separation

What traps do firms fall into when spinning off parts of the business?
And how can they best avoid them?
23
RECYCLING
A different type of
transformation.
What happens to
aluminum?
30
29
PRODUCT OF
THE FUTURE
Small but
powerful, and often
underestimated. What
exactly are LEDs?
HR MANAGEMENT
Thomas Tomkos talks about departures

Companies often have an easier time letting people go than the other way around.
Why? And when is the best time to say goodbye?
WORKSHOP
33
WORTH KNOWING
Facts & figures

Petrochemicals, automotive suppliers, risk controlling and the power
of innovation in developing countries
37
2
FIGURE IT OUT
KIOSK
Essay: Thinking about limits

39
OUTLOOK
In the next issue:
Material
bottlenecks: Dealing
with shortages
Book tip: On Good Management. The Corporate Lifecycle.

Three thoughts on key issues
38
3
EDITORIAL
39
IMPRINT
7 QUESTIONS FOR...
...Eberhard Sieger
Fresenius Medical Care's COO coordinates 20 production facilities around the globe,
each of which has as many as 2,000 employees. How does he do it?
4
TITLE
| MAIN TOPIC |
TRANSFORMATION
>Noun (Lat. transformare, "to change

the shape or form of"): A basic change of
shape or structure without the loss
of substance or content. A business
transformation involves redefining all
the company's relationships<
TITLE
TR A NSFOR M ATION
BETTER A
FEASIBLE SOLUTION
NOW THAN A
PERFECT SOLUTION
TOO LATE
Transformations push companies to their limits. What appears to
be the right step today may turn out to be the wrong
step tomorrow. Successful transformation means institutionalizing
change in the organization
AT FIRST SIGHT it looks simple. A firm's "operating

model" is, in broad terms, defined as its chosen
operational and organizational structure for the
process of delivering goods or services. This can
be limited to its core operating processes or it can cover all
the business processes, including distribution and crossdivisional functions. Firms use their operating model as a
tool to secure their business and strengthen their position
in the value chain. Make-or-buy questions, striking the
right balance between centralization and decentralization,
choosing between direct and indirect sourcing and deliv-
ery of products, deciding whether to integrate a supplier

or sell a business to a competitor in times of constant
globalization and dynamic markets, these are everyday
matters.
But the reality is far from simple. How can firms achieve
growth in mature markets and concentrating industries?
What opportunities do niche markets offer? How should
companies deal with increasingly strict regulation? And
above all, how should they respond to pressure from
developing nations and aggressive competitors? These are
the questions that firms face on a day-to-day basis and
7
TITLE
TR A NSFOR M ATION
"If you want to shape
the future MARKET,

simple organizational repairs
and optimizations
are not enough."
that for many represent their greatest challenge. Recent
years have seen deep, painful restructuring processes in
the business world. Yet few top managers are really happy
with how things have turned out. Focusing solely on
cutting costs and streamlining the organization whittles
companies down to their bare bones and compromises
their strategic flexibility. New growth based on innovation
rarely results from cost-reduction or efficiency-boosting
programs frequently carried out chiefly for the sake of
being seen to be doing something.
Many businesses are now able only to react; they are
no longer able to take action. Never has uncertainty been
greater: Conditions can suddenly worsen and business
complexity grow overnight. For many companies, managing
in times of hyper-volatility means simply taking things as
they come. The road ahead has become impossible to
foresee.
Roland Berger Strategy Consultants has helped many
successful companies through processes of transformation.
What can we learn from these companies? How did former
incumbent monopolists such as the German power
companies E.ON and RWE manage to turn themselves
into global players? How did they successfully integrate
their acquisitions? How did a number of separate national
companies become the leading aerospace firm EADS? In
other words, where should we look for examples of
successful transformation?
MANAGEMENT
THE ART OF THE IMPOSSIBLE
The legendary head of US conglomerate General

Electric (GE) and American management star Jack
Welch elevated the art of the impossible to a
guiding management principle. His motto was
"fix, close, or sell". Under his leadership, a permanent mood
of crisis became the key feature of GE's corporate culture.
Welch rigorously pruned the organization back to its core
competences, sold off unprofitable or unpromising parts of
the organization and spent billions buying up dozens of
new businesses. He also spearheaded a cultural revolution
that swept old traditions out of its path. Fortune magazine
and its German equivalent manager magazin named him
"the world's toughest boss". His nickname? Neutron Jack.

Welch's key achievement was to transform a somewhat
ragtag GE into a lean, mean growth machine, focused on
one thing and one thing only: customer satisfaction. In the
1980s, Motorola developed the Six Sigma program. Welch
made it his religion.
The name "Six Sigma" is a reference to standard
deviation, represented in statistics by the Greek letter
sigma. Sigmas are used to measure the spread of process
results around a mean. Three sigmas indicate roughly
67,000 defects per million opportunities (DPMO). In realworld conditions, Six Sigma quality means 3.4 DPMO, or
99.99966% defect-free.
At first sight, Six Sigma looks like cost management in
a new guise. But although Six Sigma does involve saving
costs, it involves much more besides. It means profoundly
transforming a fi rm's character to achieve operational
excellence without significantly changing the business
model in the process.
The principle is as relevant today as it ever was more
so, in fact. According to Volkmar Denner, CEO of Robert
Bosch, the world's biggest automotive supplier, the
company is in the midst of a paradigm shift and fundamental transformation process.
Denner is busy transforming Bosch into a broad-based
technology concern. True, the company recently acquired
the Service Solutions division of US multi-industry
manufacturing firm SPX Corporation for a cool USD 1.15
billion with the aim of exploiting growth opportunities in
its core car business and strengthening its profitable
repair shop business with new diagnostic machines and
other equipment. But at the same time, Denner looks to
the future, talking about ideas such as "the Internet of
things and services" a new world in which machines
communicate with each other largely independently and
intelligently.
"Networking via the Internet is one of the most
powerful global trends, still greatly underestimated by
many businesses," says Denner. For Bosch, it's all about
connecting the virtual and physical worlds. That means
not just producing things, but making sure that they are
connected via the Internet and offer customers added value
via supplementary online services.
The Internet has experienced many technological leaps
since its creation. Denner again: "Today, we can assume
that the power of computers, the bandwidth available for
data transmission and the memory capacity of cloud
computing will double every two years or so." This is the
basic driver for the technological road forward a road
that ultimately leads to "the Internet of things and services".
Time is of the essence. "Above all, we must be fast enough
to keep up with the rapid development of the market long
term. Only by doing so can we master the challenges that
technological progress brings in its wake. And only then
can we make the most of the great opportunities that this

offers for our customers, our employees and the Bosch
Group as a whole," says Denner.
SETTING THE BAR THROUGH

TRANSFORMATION
If you want to shape the future market, simple

organizational repairs and optimizations are not
enough. Firms must systematically reorganize their
business systems, intelligently linking restructuring
and innovation, cost optimization and growth. Keeping up
with the best in the industry is not sufficient: You need to
constantly reset the bar. The key word is transformation;
the goal is a company that continuously transforms itself.
If it decides to go down this road, it needs to reformulate
and restructure its strategic and operating processes.
This process must involve every part of the company,
including marketing, management, structures, strategies,
resources and processes. Successful transformation means
institutionalizing change in the organization, thereby
securing the very future of the business. Transformation
is not an isolated management tool.
In its most effective form, it is a practical combination of

various methods and approaches. Fundamental portfolio
adjustments, innovative market strategies, business
process reengineering and organizational realignment
are combined with tools from sustainable change
management, implementation and steering.
Transformation is not just about optimizing or adding
things, either. Sticking to the old structures or adding new
elements does not always lead to success. Ultimately,
transforming an operating model is about swapping
something old for something new. Physical assets need to
make room for new elements. New competencies need to
be incorporated. The firm's culture, traditions and IT
systems must evolve.
Continuous transformation streamlines the company's
processes, but reshaping the operating model can go much
deeper. It can be painful, too, involving shutting down
factories, changing the value chain model, spinning
off traditional activities and outsourcing former core
competencies. Transformation doesn't just mean careful
optimization: it means transitioning to a radically new
operating model.
Sometimes transformations can go wrong. French
electronics company Technicolor (formerly Thomson) tried
FROM SHOCK AND DENIAL TO ACCEPTANCE AND INTEGRATION:

Dealing with major change always follows a certain pattern
MOTIVATION/
PERFORMANCE
> Good management

helps people understand
change, accept it
and make the necessary
adjustments faster
Denial
TARGET
With change
management
TARGET
Integration
ACTUAL
Acceptance
Shock
Trial
Anger/guilt
Depression
Source: Roland Berger
TIME
to leave its former core area of entertainment and enter the

digital video business with disastrous results. Between
2000 and 2006, it acquired a number of companies in
line with its ambitious new strategic direction. But
limited integration, little strategic transparency and a
horrendous level of debt led the company to the brink of
collapse. Only fi nancial restructuring managed to save
the fi rm's neck.
TIMING IS EVERYTHING
Corporations rarely transform themselves

proactively they are afraid of the costs involved,
the complexity, the risk, or all of the above. It
comes as no surprise, then, that firms frequently
take action only when their backs are against the wall.
This is particularly damaging when managers lack the
C
10
proper set of tools required for the transformation process,

leading to indecision and costing valuable time. The longer
the transformation lasts, the more difficult it will be.
The right moment for transformation is when the pressure
on the firm is so great that there appears to be no alternative to tough action, but the company still has the time
and the resources needed to carry it out. Ideally, one
should never put off making a transformation: It may
deliver an advantage over competitors who are facing the
same or similar issues. Unfortunately, the signals for
identifying the right moment are not always the same. A
key task of managers is to systematically scan competitors,
customers, suppliers and new technologies and spot
whether the game is changing or about to change.
The indicators they use need to be comprehensive,
sophisticated enough to allow the firm time to react, and
sufficiently accurate for management to know where to
take action.
TITLE
This is very complex, of course. Take the aerospace industry. First, there was a period of "design anywhere, build
anywhere". The aim was to reduce labor costs and avoid
exchange-rate fluctuations. Then companies started reinternalizing their activities to protect their innovations
from overly inquisitive competitors.
A similar process took place for global iron and steel
producer ArcelorMittal, which has gradually shifted its
business from manufacturing products to extracting raw
materials.
Their rationale was that iron ore was becoming
more expensive, so the profit pool was shifting toward
ext ractors. However, lower demand from Asian
infrastructure programs and the proliferation of new
mining projects could soon reverse this trend, forcing
ArcelorMittal to reposition itself once again.
SEVEN BASIC RULES FOR

SUCCESSFUL TRANSFORMATION
The examples above make it clear that transformation must be an ongoing, constantly reiterated
process. As such, it needs to be carefully planned
and prepared for. Setting transformation processes
in motion and then steering them is one of the greatest
managerial challenges of our time. To ensure success,
managers must follow seven basic rules:
1. Align all the transformation processes with a

clear vision
2. Demonstrate top-management engagement and
commitment
3. Ensure a professional, comprehensive project design
4. Quantify targets (including intermediate targets)
and assign clear responsibilities
5. Fully involve the workforce early on
6. Invest in communication
7. Create a framework for results-oriented work
For many managers, defining strategic goals for the
transformation and then dividing them up into different
modules feels like a herculean task. But doing so helps the
organization understand the path to be followed and
achieve ambitious goals.
Managers should start with three simple questions:
What are the reasons for the transformation? Who is
affected? And what is the end goal? All too often, managers
overestimate the ability of their company to understand
the basic concept behind the transformation.
They pay insufficient attention to planning, detailing
and communicating the change. The best transformation
plans consist of four to five different modules: Implement
a new organizational setup, reshape assets, transform
TR A NSFOR M ATION
THE THREE PHASES

OF TRANSFORMATION
1
PHASE ONE /
Develop a target
business concept:
Transformation is a conscious
act of will on the part of the
company. The initiative and
impetus must come from top
management. A robust business
concept, based on a clear
vision, provides the strategic
direction and framework
for the transformation. When
it comes to the innovations
on which the subsequent
transformation process builds,
the company doesn't have
to reinvent the wheel: Many
innovations are simply ideas
that have been transferred from
other companies or industries.
2
PHASE TWO /
Implement the target
business concept:
The vision and strategic
direction should now be
fleshed out to form a concrete
operating model, ready for
implementation. At the same
time, the company should
address a variety of specific
issues process optimizations,
realigning the structural
organization, product and
process innovations, and so
on so that the design goals
defined in Phase One can be

realized. Two matters must
take top priority: implementing
as many levers as possible
from the business concept,
and radically rebuilding
the company itself and the
business system. Making
superficial changes or
optimizing only details will not
have the desired effect here.
3
PHASE THREE /
Ramp up the
transformation:
Lasting change is impossible
without the help of the
company's employees. The
entire workforce must
be involved in rebuilding the
company, actively participating
in team-based problemsolving. A comprehensive
change management process
is needed, including intensive
communication, workshops
to cascade expertise down
through the organization,
and training to teach staff
new skills. Active employees
contribute creativity and
knowledge of problems,
sharpen their awareness of
issues and are able to
grasp the thinking behind the
transformation process. They
need to accept the changes
in order to implement them
long term. In this way, they can
become the cornerstone of a
learning organization.
11
TITLE
K NOW LEDGE
Companies around the globe are searching for a

new future and making dramatic breaks with their past.
GLOBAL
PERSPECTIVE
"PHILIPS"
NETHERLANDS
> As TV business declines and
Asian competitors increasingly
enter the market for household
appliances, Philips Europe's
biggest supplier of consumer
electronics will be turning its
focus to medical technology.
"VATTENFALL"
SWEDEN
> In the past, Swedish energy
company Vattenfall hit the
headlines with breakdowns at
nuclear plants and the
construction of new coal-burning
power plants. In the future, it
will be making new investments
only in renewable energy plants.
"TOYOTA"
JAPAN
"COMMERZBANK"
GERMANY
"NEW YORK TIMES"
USA
> The New York Times has shown
that earning money with digital
media is possible after all.
Its online pay scheme has given
it a completely new source of
revenue and is considered a
model for ensuring the survival
of the industry worldwide.
12
> Commerzbank hopes to

increase the profitability of its
retail business with the help
of new products and modern
technology. Its objective is
to create a multichannel bank
with a more flexible branch
network, providing customers
with products and services
anytime, anywhere.
"SAP"
GERMANY
> SAP's acquisition of the US
sourcing platform Ariba gives
the German group a further
foothold in "cloud software",
where software is no longer
located in the computer
itself but can be accessed
as needed via a network from
a desktop computer, laptop
or cell phone.
> Toyota's future focus will be

on electric vehicles driven by fuel
cells rather than by batteries.
To cover development costs,
Toyota is working on the fuel
cell together with Honda, on
the hybrid technology with
Ford, and on building compact
cars with Renault-Nissan.
TITLE
the supply chain, adjust enterprise resource planning

capital, operating assets and people must be deployed as
efficiently as possible and so optimize the steering of
business processes, say. These modules generally cover all
the main areas for transformation. They help everyone
understand where the priorities lie and are a great aid to
communicating the change.
ENGINEERING THE TRANSFORMATION:

DESIGNING A ROADMAP
AND CHANGE MANAGEMENT PLAN
A roadmap is needed to ensure a smooth transformation. This roadmap should be divided up

into "milestones" the more extensive and difficult the transformation, the more detailed the
plan should be. Ideally, the first step is to evaluate the mood
of the employees. What are their expectations? Are they
likely to accept the changes? And how easy will it be for
them to change?
On this basis, the firm can then develop an incentive
program, communication plan, and coaching and training
plan, especially for those parts of the workforce most
affected by the change. Every minute and every employee
counts. A firm undergoing transformation is fragile, and
stakeholders starting with the management will be
constantly on the lookout for any signs of success or
failure. If anything goes wrong, the whole transformation
process may immediately be called into question.
This is exactly what companies need to avoid. Managers need to be able to inspire their teams. Transformation
requires end-to-end communication, on all levels. Trust is
golden. Employees are the most important ambassadors of
change. Customers, business partners and shareholders
must also maintain their belief in the solidity of the firm,
the necessity of the transformation, and the likely success
of the project.
People must have faith that the transformation plan is
the work of someone who knows what they're doing. The
BUSINESS
TIPS
The three rules

of thumb at a glance
TR A NSFOR M ATION
"A firm undergoing transformation
is FRAGILE. Everyone involved

will be constantly on the lookout
for any signs of success or failure."
project should be led by someone on the Board, supported
by a central Transformation Office and a Project Office.
Steering the transformation is only one part of the job: Top
management should support the project with a special
management committee whose role is to examine missioncritical modules and assign tasks and responsibilities.
Transformation specialists should also support the actual
work, on all levels of management.
A QUESTION OF CREDIBILITY:
MAINTAINING PERFORMANCE DURING
THE TRANSFORMATION
The more levels of the organization the transformation process affects, the more important it
is to monitor actions and results. Especially with
bigger projects, it is a good idea to have a special
controlling system. Results should be expressed in terms
of what they mean for the fi rm's accounts additional
revenue shown as marginal contribution, say, faster processes reflected in less tied-up capital, financial innovations
shown in the costs of capital, increased productivity in the
personnel costs.
Yet as important as the ability to measure and plan
change is, firms need to strike a balance. The transformation process must not get bogged down in planning bureaucracy. It needs a constant impetus. It thrives on the swift
implication of actions. Ultimately, it is better to implement
the second-best solution quickly than the ideal solution when
it is already too late.
1/
2/
3/
Never put off a

transformation
you risk losing
advantages over
your competitors.
The more levels of

the organization
the transformation
process affects, the
more important it is
to monitor actions
and results.
The more extensive

and difficult the
transformation, the
more detailed and
better structured the
plan must be.
13
TITLE
VOICES
WHAT THEY
SAY ABOUT
CHANGE
From Kaiser Wilhelm to Henry Ford, from
Steve Jobs to soccer legend Franz Beckenbauer,
it seems like everyone has something to
say about change. Their observations are smart,
thought-provoking and witty and at times
anything but politically correct
5/
JOHN SCHAAR
US POLITICAL
SCIENTIST
2/
JOHN F. KENNEDY
US PRESIDENT
The problems of the world
cannot possibly be solved
by skeptics or cynics whose
horizons are limited by the
obvious realities. We need
men who can dream of
things that never were, and
ask why not.
3/
FRANZ BECKENBAUER
SOCCER PLAYER
The future is not a

result of choices
among alternative
paths offered by the
present, but a place
that is created
created first in the
mind and the will,
created next in
activity. The future
is not some place
we are going to,
but one we are
creating. The paths
are not to be found,
but made. And the
activity of making
them changes both
the maker and the
destination.
Let's have a look,

then we'll see.
1/
STEVE JOBS
FOUNDER OF APPLE
Death is very likely the single best invention of life.
It's life's change agent. It clears out the old to make
way for the new. (...) Sorry to be so dramatic, but
it is quite true. Your time is limited, so don't waste
it (). Don't be trapped by dogma which is living
with the results of other people's thinking. Don't
let the noise of other people's opinions drown out
your own inner voice. And most important, have
the courage to follow your heart and intuition. (...)
Everything else is secondary.
14
4/
JOHANN W.
VON GOETHE
POET
When a great idea enters the
world as a gospel, it becomes
an offense to the multitude,
which stagnates in folly;
and to those who have much
learning but little depth, it is
folly. Every idea appears at first
as a strange visitor, and when
it begins to be realized, it
is hardly distinguishable from
fantasy and illusion.
6/
KAISER WILHELM II
OF GERMANY
I believe in
the horse the
automobile is
just a temporary
phenomenon.
7/
CARLY FIORINA
BUSINESS LEADER
13 /
HENRY FORD
AUTOMOBILE PIONEER
Strong leadership has to

do with change. You have
to seize opportunities.
10 /
ANDY WARHOL, ARTIST
8/
ST. FRANCIS
OF ASSISI
Lord, grant me the
serenity to accept
the things I cannot
change, the courage to
change the things I
can, and the wisdom to
know the difference.
When people are ready to, they change.

They never do it before then, and
sometimes they die before they get around
to it. You can't make them change if
they don't want to, just like when they
do want to, you can't stop them.
14 /
BERTHOLD BRECHT
PLAYWRIGHT
Little changes are the
enemies of great changes.
11 /
ALAN MULALLY, CEO,
FORD MOTOR COMPANY
As demoralizing as a slide down may be, the ride up
is infinitely more exhilarating.
9/
LAWRENCE J.
ELLISON, CEO,
ORACLE
CORPORATION
Behind most great
and successful
products or businesses
are entrepreneurs
who were turned
down a hundred times.
Anyone who stops learning

is old, whether twenty or
eighty. Anyone who keeps
learning today is young.
The greatest thing in life is
to keep your mind young.
12 /
JACK WELCH
FORMER CE0,
GE
We knew what it meant

to be a great company.
A great company
can do nothing worse
than "administer" its
greatness. Greatness sets
you free or it inhibits
you. We tried to remind
ourselves every day
that our greatness gave
us the freedom to travel
new paths.
15 /
CHARLES DARWIN
BRITISH
NATURALIST
It is not the strongest of
the species that survives,
nor the most intelligent
that survives. It is the one
that is most adaptable to
change.
15
Bostik chief and

Member of
the Board at Total
Bernard Pinatel took
the helm of the French
adhesives specialist in
2010 and has since
left no stone unturned
16
TITLE
"WE MUST
AWAKEN
A GIANT
FROM ITS
SLUMBER"
When he first took office, Bernard Pinatel, CEO of France's
Bostik Group, prescribed a radical cure for the innovative
adhesives specialist. The Pegasus transformation project sets
an example for other companies as they move into emerging
economies. In what way?
INTERV IEW
The company
in figures
BOSTIK
4,800
EMPLOYEES
in more than 50
countries (from France
to New Zealand).
1.5
BILLION EURO
(2012 sales) make
Bostik the global market
leader for high-tech
adhesive and sealing
solutions for construction,
transportation, hygiene
products and packaging.
3
IN-HOUSE R&D LABS
Monsieur Pinatel, over a
century ago, Bostik started
out as a manufacturer
of shoe adhesive. What
remains of that business
today?
Not very much, I fear.
Shoe adhesive is a mature
technology from which we
have long since moved on.
One thing has remained,
though: the Bostik brand. Our
venerable tradition makes us
an institution in the field of
adhesives. The name Bostik is

synonymous with quality and
first-class service.
Where does Bostik operate
today?
In three large markets. The
first are our retail customers.
Then there is the building
trade. Lastly, we partner with
large industrial customers,
including prominent
automotive companies and bigname manufacturers of
hygiene products. To serve

these customers, we have
identified three technology
platforms in which we are
number one or two worldwide
and which give us a critical
edge over the competition:
elastic adhesives for tough and
flexible bonding; pressuresensitive adhesive technologies
that can be repositioned and
reused; and adhesives that use
hydraulic bonding agents and
polymer dispersions for the
and 11 centers of applied

research. Bostik's
worldwide R&D spend is
set to double over the next
five years.
17
TITLE
INTERV IEW
About
BERNARD
PINATEL
>Bernard Pinatel studied
at the Ecole Polytechnique
engineering school, the
Paris Graduate School of
Economics, Statistics and
Finance (ENSAE) and the
Institut d'Etudes Politiques
(Sciences Po).
>He also has an MBA from
the INSEAD Graduate
Business School. He began
his professional career
as a strategy consultant at
Booz Allen Hamilton.
>In 1991, Pinatel joined
Total subsidiary Hutchinson
as an analyst in the
Strategy Department,
subsequently becoming
Vice President Production
in Germany. A three-year
spell with Synthron
preceded his return to
Total in 1999.
>Pinatel was appointed
CEO of Bostik France a
year later, and of Bostik
Europe in 2003.
>In 2012 he assumed
global responsibility as
CEO of the Bostik Group,
and was also appointed
to Total's Management
Committee a year later.
18
construction industry. We
want to concentrate our
resources on these platforms.
That sounds like a
complete overhaul.
We are in the middle of a
transformation process. The
very name "Pegasus" is a sign
that we are pressing ahead
energetically toward our aim
of technology leadership. We
want this vision to take wing,
so to speak.
Why?
Bostik has grown constantly
through acquisitions, evolving
into a federation of small and
medium-sized companies with
sales of over EUR 1.5 billion
and 4,800 employees.
We have incorporated around
30 medium-sized companies
into the group since 2000.
Today we operate in over 40
countries, where we sell a
comprehensive portfolio of
modern technologies. In the
long run, however, that will
push our decentralized
organization to its limits.
Up to now, Bostik has been a
generalist with a rather
narrow focus. It has been
unable to translate its size
into genuine competitive
advantages. The challenge
now is to awaken the Bostik
giant from its slumber.
What was your initial
focus when you began at
Bostik in 2010?
The first thing was to take
stock. On the assets side, I
noted Bostik's enormous
potential: good technologies, a
strong brand, international
staff with an entrepreneurial
mindset and solid financing.
On the liabilities side, I saw a
lack of focus and slow growth.
That was no longer acceptable.
"MY PRIMARY
TASK IS TO CHART
THE COURSE,
STAKE OUT THE
DIMENSIONS
AND PUT THE RIGHT
PEOPLE IN THE
RIGHT PLACES"
Working from the conviction
that our company possesses
excellent growth potential, we
concentrated on our strengths
and developed a clear-cut plan
of action: global expansion
based on specialized
technology platforms and
central marketing.
The company was set up in
the US, then taken over by
French oil and gas giant
Total in 1990. How would
you describe Bostik's
corporate culture today?
Is it American? French?
International?
Definitely international and
multicultural. That is the glue
that binds us together. We
operate a flexible model that
commits us to entrepreneurial
initiative. It is built around a
small holding company with
sovereign functions such as
HR, finance, central
management and purchasing.
Our operating units are close to
our customers around the
world, with the result that we
are often perceived as a local
company. We know our endcustomer markets very well.
How strong is Total's

influence?
With our growth-driving
acquisitions, Total has been
instrumental in Bostik's
positive development. A year
ago, Total reviewed our
transformation strategy and
gave us the thumbs-up to go
ahead and implement it. In
return, Total expects
convincing financial results
which is perfectly natural.
Henkel, Germany's market
leader in adhesives, posts
sales that are six times
those of Bostik. That's not
an easy position for you to
be in. What weapons do
you have at your disposal?
First of all, we have our
innovative strength. We know
how to make intelligent
adhesives: functional products
that can do a lot more than
just stick things together
and that are also sustainable.
Products that are less than
three years old currently
account for 11% of sales. By
2016, we aim to increase that
to 15%. Then there are
emerging markets such as
TRANSFORMATION THROUGH INNOVATION

The Roland Berger approach focuses on six levers to achieve sustainable
corporate transformation
Goal To activate growth
Goal To optimize costs
STRATEGY
Focus growth/
investment
RESOURCES
Knowledge/finance
GOAL-ORIENTED
TRANSFORMATION
TROUGH
INNOVATION
MARKETING
Products/services
Systems (sales, etc.)
PROCESSES
Differentiation
Time/costs
MANAGEMENT
Motivation
Compensation/rewards
STRUCTURE
Centralization/decentralization
Leaner hierarches
Source: Roland Berger
>KEYWORD: BUSINESS TRANSFORMATION

A fundamental change in a company's relationship with
its business and social environment. A business
transformation involves redefining all the company's relationships.
China and Brazil, where our

multicultural corporate DNA is
a promising growth driver. In
2008, we had 900 employees
in the Asia-Pacific region.
Today, we have 1,500. Three
years ago, only 13% of our
sales came from emerging
markets. By 2013, the figure
will probably have doubled.
But our real objective is even
more ambitious: We want to
generate more than a third of
our sales in high-growth
regions. Only recently, we

took two new facilities into
service in Cairo and Ho Chi
Minh City. We have now
launched production in
Shanghai, our third site in
China. And the takeover of
Usina Fortaleza reinforces our
presence in the Brazilian
market. We have another
strength, too, which should
not be underestimated: our
operational excellence. We are
launching an assault from all
sides service, quality, and

competitive cost structures.
The need for transformation
is a matter of heated debate
right now. What do you
understand by this phrase
at Bostik?
Transformation is not an end
in itself. Its aim is to help us
tap our tremendous growth
potential. The focus is on our
vision: To sell intelligent
adhesives adhesives with
19
additional functions. Diapers

are a good example because
they are easy to understand.
We have developed adhesives
that not only stick, but also
change color when the diaper
is wet. Smart products of this
kind lie at the heart of what
we are doing. We want to
leverage them to transform
ourselves from the inventor
to the manufacturer of
pioneering products.
What exactly do you mean?
We are transforming our
organizational structure from
a local model to one with a
more global orientation. As I
see it, the development of new
materials in scientific
laboratories is one of the most
important trends of the 21st
century. We have set up three
central laboratories for this
purpose for the Americas,
Asia and Europe respectively.
In addition to the US
laboratory in Milwaukee, we
are currently building a large
research center at Compigne,
France, that will go into
service in 2014. The third
laboratory, in Shanghai,
opened recently. Each of these
facilities works like a global
center of excellence for our
technology platforms. That
shows how far we have
already progressed along the
road from generalist to
specialist. Maybe we no longer
sell everything, but what we
do sell is world-class.
You have opted for a
multi-stage transformation
process. Why?
Right from the outset, we felt
that this approach was the
most sensible one. At a
very early stage, we realized
that we didn't want to do
everything at once.
20
Not all at once

Bostik's Pegasus
transformation
project comprises
four stages, spread
over five years
We felt that a slower approach

would give the company room
to absorb the changes step by
step without compromising
the high standards of which
we are rightly proud at Bostik.
In spring 2011, we staked out
the framework for the four
stages of transformation. After
that, we defined and further
divided up action packages for
all five years of the Pegasus
project.
An entrepreneurial
vision is one thing, but
the specific need for
transformation is another.
How do you link the two?
The vision comes first, and the
strategy flows from that. Every
guideline imposes principles
that must then be broken
down into action plans. For
example, the Pegasus project
involves doubling our
worldwide R&D spending over
TITLE
"WHETHER OR NOT
A MESSAGE
IS RELEVANT AND
COMMANDS
CREDIBILITY IS
JUDGED BY WHETHER
MANAGERS BEHAVE
APPROPRIATELY
IN THEIR DAY-TO-DAY
WORK"
the next five years. We are
redefining our R&D
governance from scratch
at the global level. And in the
process, we are completely
redefining the organization,
the processes and tools, the
activity profiles, the way we
develop and train our
engineers, and the interface
with marketing.
What is your verdict so
far, halfway through the
Pegasus project?
2012 was a very good year for
Bostik. We were able to
increase our sales by 10%.
We are growing despite the
difficult climate, which is
encouraging for our teams.
Many transformation
processes fall at the hurdle
of communication.
How do you mobilize the
organization?
We launched Pegasus with a
worldwide road show. A global
conference with our senior
managers was followed by
meetings with the managers

from the major regions, where
we talked about strategic
action areas and the metrics
we would use to measure our
success. One example is what
we call our Innovation
Performance Indicators.
We keep our teams regularly
informed via newsletters and
videos. The end-of-year Global
Innovation Forum, at which
we present prizes for
exemplary innovation, also has
an important part to play.
We created the Bostik
University in partnership with
the Vlerick Business School in
Belgium, drawing up a series
of training programs that
include finance, strategy and
leadership modules as well as
case studies taken from our
companies. Interestingly, the
broad consensus among our
people is that globalization
means that we have to change,
too. The fact that we invest
heavily in developing talent,
recruiting and marketing is
undoubtedly another powerful
5 x Pinatel
INSIGHTS
1/
GROWTH
"Transformation is not an
end in itself. It is intended
to help us tap our growth
potential."
2/
PRODUCTS
"Maybe we no longer sell
everything, but what we do
sell is world-class."
3/
STRATEGY
"The vision comes first,
and the strategy flows
from that. Every guideline
imposes principles that
must then be broken
down into action plans."
4/
PERSONNEL
"We are adopting an
international approach to
the personnel build-up
in order to further enrich
our cultural diversity.
Diversity is a key part of
our strategy."
5/
COMMUNICATION
"Barrier-free contact and
communication with top
management is essential
to the way we work."
INTERV IEW
motivator. Coupled with the

support Total has given us for
our growth policy, this
confirms the wisdom of our
strategic vision.
Has Pegasus changed
the style of management
at Bostik?
Bostik has always had an
informal, open management
style. That has not changed at
all. Barrier-free contact and
communication with top
management is essential to the
way we work. My door is
always open, and that goes
for all the other doors at topmanagement level in our
headquarters as well.
But there are still areas
that you need to develop,
aren't there?
Yes, our personnel, which we
are currently doubling at
strategic locations. We are
doing that for production, but
also for our finance and sales
units in fiercely competitive
markets. We are adopting an
international approach to the
personnel build-up in order
to further enrich our cultural
diversity. Diversity is a key
part of our strategy.
And the CEO? What part
does he have to play?
My primary task was to chart
the course, stake out the
dimensions and put the right
people in the right places. I
also believe that it is important
to be a role model. Whether
or not a message is relevant
and commands credibility is
judged by whether managers
behave appropriately in their
day-to-day work. It is also
important to communicate
the messages that you have
defined, again and again. And
it was crucial that our teams
21
TITLE
INTERV IEW
Adhesives from Bostik
EXAMPLES
INDUSTRY: HIDDEN
FROM VIEW, BUT GREAT ON
PERFORMANCE
A tall order: Diapers are expected to keep
baby's skin dry, but also to stand up to the
wild climbing and sliding exploits of adventuresome three-year-olds.
They mustn't leak, hurt, draw attention to themselves or damage
the environment. That's where hygienic adhesives come in, sticking
together the parts that belong together. Bostik has pioneered the
development of adhesives in bodycare and hygiene. The first ever
patent-protected affixing adhesive for women's hygiene products
comes from Bostik. Today, the company's adhesives can be found
in many products: diapers, incontinence products of all types,
non-woven products, handkerchiefs, wet towels and wipes for
home and industrial use. Bostik also has a strong presence in the
automotive, transportation, aviation and shipping industries.
CONSUMERS: DO IT YOURSELF
Crisis? What crisis? Generally speaking,
DIY and home improvement stores are as
upbeat as ever. In Germany alone, every
passing year sees more people leave more
money in the country's 2,500 or so stores. And no wonder: Doing it
yourself if it works is far less expensive than forking out for a
professional tradesman or -woman. Germany's DIY and home
improvement stores turned over nearly EUR 10 billion in the first six
months of 2012, and the uptrend has yet to peak. Bostik is reaping
the rewards. PVC glue, tile and parquet adhesives, wallpaper
adhesives and removers, sealants, foams you name it, the French
specialist has everything you need for bonding and sealing when it
comes to building, renovating and modernizing. The company's
motto? Professional quality for all.
CONSTRUCTION: DON'T
SCREW IT STICK IT
In almost every area of construction and
industry from first-time building
to modernization traditional joining
processes such as welding, riveting and screwing are being
complemented or replaced by the use of adhesives. Modern
adhesives are simple to use, don't make a mess and can bond all
kinds of materials without difficulty. Bostik claims to sell the industry's
most comprehensive array of innovative, professional-standard
adhesives for the construction industry. The spectrum covers everything you need for bonding, durability, flexibility, water resistance
and resistance to the elements. Bostik's recipe for success?
Experience, the ability to innovate even in supposedly mature
product areas, and all-round support including technical advice,
training, specification and on-site analysis for professional users.
22
"ONE OF MY DAILY
TASKS IS TO
SAY NO, TO EXPLAIN
THAT YOU CAN'T
DO EVERYTHING
YOURSELF"
successfully communicated
all these changes to Bostik's
partners, customers and
suppliers. In addition, I am
personally responsible for
keeping our major shareholder
informed of the progress of the
project.
How do you maintain
consistent operational
performance during such
a transformation?
It's not easy. Doing the same
things again and again
drilling them into our people's
consciousness helps a lot. It
keeps our teams from falling
back into their old ways and
wanting to do everything
themselves. One of my daily
tasks is to say no, to explain
that you can't do everything
yourself. In the course of the
transformation, we have also
rolled back and prioritized
certain projects.
Our challenge is to continually
devote our full energy to the
work of developing the
technologies of the future. The
fact that our teams have a clear
roadmap and clearly defined
responsibilities makes them
much more effective.
Aren't you afraid that
centralizing your strategy
could pose a threat to the
authenticity of your brand?

Not at all. On the contrary, we
are strengthening our brand.
And the human factor will
continue to play a pivotal role
at Bostik in the future. The
challenge for us is to keep our
enterprising spirit and our
ability to acquire and provide
optimal service to customers
alive in the long term, and
at the same time to translate
our strengths into success
around the globe. Ultimately,
the bottom line is always the
measure of your success.
In light of your experience,
what advice would
you give to a company
that is thinking about
transformation?
The most difficult thing is to
mobilize the company and its
people. Compared to that,
developing a transformation
concept is easy. It is very
important to communicate a
clear, coherent and consistent
message. And then, above all,
you have to ensure that the
message is heard, understood
and put into practice. Your
people and your teams need to
know that the management
gives its unreserved backing to
the project, that everyone
will be pulling in the same
direction.
TITLE
K NOW LEDGE
Aluminum: A special kind

of transformation
RECYCLING
100 %
60
70 %
Aluminum casings can also be

recycled comparatively quickly. Within
60 days, the material is
back on store shelves in a new form.
Aluminum is the most-recycled

packaging material in the world.
Around the globe, nearly 70%
of all aluminum cans are recycled.
3h
Recycling a single aluminum can
save as much energy as a television
uses in three hours.
Aluminum recycling requires

95% less energy than
manufacturing primary aluminum.
WASHINGTON
110 000 000 000
If all of the nearly 110 billion cans made in the US every year
were recycled, a city of the size of Washington, D.C.
could be supplied with electric power for almost four years.
1880
Additionally, aluminum
recycling can "save" nearly
170 million tons of
greenhouse gases worldwide.
95 %
Industrial production
of aluminum
began in the 1880s.
75 %
Some 75% of the aluminum
that has since been manufactured
is still being used.
23
TITLE
CA RV E- OU TS
We have lift-off!
Crashes, failed acquisitions,
integration problems:
The reasons for carve-outs
are many and varied
as are the rules for handling
the separation successfully
24
THE ART
OF SEPARATION
A painless farewell? Carve-outs are essential to ensure
a healthy portfolio. But spinning off parts of the company can be
a tricky business. What traps can firms fall into?
25
TITLE
CA RV E- OU TS
heels of a crash. Sometimes fi rms are forced to get

rid of their problem children as a result of mistakes
by management, portfolio streamlining, debt, or
simply a change of strategic course. Often a number
of factors come together as in the case of Lanxess.
Corporate crises can demand major sacrifices.
And on occasion, the owners decide that the
core business has more growth potential and value
than a ramshackle assortment of subsidiaries and
shareholdings.
WHAT A TURNAROUND: Leverkusen-based chemical company
No one is immune. Generally, however,
Lanxess had a difficult birth in 2004, consolidated its
carve-outs are easier at medium-sized companies
than in big corporations. As a rule, the changes
position and is now since last September one of the most
there especially those with major consequences
valuable firms in Germany. The company has risen to
for stakeholders meet with less resistance.
the heady ranks of the DAX-30 with panache: Profit (EBITDA) But whatever the size of the company, carveouts are never easy.
has almost doubled in just seven years to EUR 1.1 billion,
From the outside, a company may look like
sales are up by a quarter, and headcount is expanding at a
a single, closed entity. But the reality can be
giddy rate of 10% a year. It wasn't always like that. The firm
very different, especially in the case of interstarted out with weak returns, painful losses and a whopping national players. Such corporations often turn
out to be highly complex formations consisting
EUR 1 billion in debt.
of structured networks of shareholdings and
subsidiaries, with countless interconnections
and interdependencies. The greatest challenge
is identifying as many of the formal and even
In 2004, weakened by the withdrawal of its cholesterol-lowering more difficult informal relationships as possible and
drug Lipobay and an ailing economy, Bayer decided to spin off its severing them in a controlled manner. If the operation is successunpopular chemicals and polymer business and float it on the stock ful, both parent and offspring thrive. If it fails, the consequences
exchange under the name of "Lanxess" a combination of the can be dire.
French word for "to launch" and the English word "success". The
At fi rst glance, it looks like a walk in the park. Take the
skeptics had a field day. Deutsche Bank described the move as necessary action with regard to the organizational structure, follow
"mission impossible". Journalists called the new firm "junk". Meryll the right legal steps and voil, you have all the necessary conditions
Lynch described it as "the least profitable chemicals firm in for a carve-out. The former business unit or division fi rst becomes
Europe." Today, they've changed their tune.
an independent entity, separate from the parent company. Only
In 2004, CEO Axel Heitmann laid down the line for the then is the exact type of separation defi ned: IPO (as in the case of
managers of the new fi rm: clear hierarchies and processes, simple Lanxess), spin-off or sale.
reporting structures, a focus on problem-solving and innovation.
The difficulties start with the transaction costs, however.
It worked. Lanxess has long since overtaken its former parent Carve-outs often overburden the organization. That means less
company in terms of its share price development and return on time for other jobs. And if core aspects of corporate planning
equity. Today, the spin-off is considered one of the most successful are neglected product or market development, say the
in modern German economic history, a model for all carve-outs consequences may be fatal.
to come.
Carve-outs require clear management. The whole process needs
Carve-out. The word suggests something faintly unpleasant. to be carefully orchestrated. Ideally, the fi rm begins by defi ning a
But for investors, a carve-out is simply a great opportunity to take carve-out strategy. It follows this with an "exit due diligence",
over the lucrative parts of a company rather than an often ailing which looks into the various strategic options and the conditions
whole. Private equity firms with a long-term orientation are always they require. Next the firm calculates the key financials and makes
on the lookout for lines of business that could be profitable but forecasts. Then comes the planning of the carve-out and divestment
that lack strategic value for their parent company. Carve-outs are projects. Finally, on the transfer date, the legal process is
about putting part of a fi rm that has been split off from the rest completed and the appropriate governance structures put in place.
solidly on its own two feet.
All in all, it's a mammoth task for management. And the
There are many reasons for carve-outs. Sometimes they are complexity of the divestment is only one of the traps that fi rms
the result of a failed acquisition. Sometimes they follow on the can fall into.
26
Managing complexity
Carve-outs are a mammoth
task for management.
The complexity of the
divestment is just one
part of the challenge; the
other is communication.
HERE ARE THE MOST COMMON TRAPS THAT

FIRMS MUST WATCH OUT FOR:
1. The carve-out is not planned from beginning to end

Corporate structures often seem set in stone. Parts of the business
are perceived as non-strategic but, at the same time, nondivestible areas that the firm cannot easily dispose of for antitrust
reasons, say. Often the fi rm fails to draw up a systematic carve-out
program.
Spinning off one area of business may not be enough: It could
be that several areas need to go. This was the case with Bayer/
Lanxess: fi rst the subsidiary became fully independent, then it
spun off certain of its own divisions, such as textile chemicals.
2. The carve-out is delayed

The decision-makers in M&As often try to drag out the process. If
they receive a good offer for the part of the company that is up for
sale, they hold out for an even better one. If they only receive offers
below the asking price, they abandon the sale altogether. Firms
often fail to recognize that the entity offered for sale must be
attractive for the buyer long term, and at least self-supporting. The
timing of mergers or acquisitions making the right decision at
the right time plays a major role in carve-outs.
3. The focus is solely on fi nancial aspects

Investment bankers and auditors play an essential role in
acquisitions. Their advice is vital and comes with a hefty price
tag attached. Financial and operational due diligence are
considered something of a silver bullet in the acquisition process.
Yet there is disagreement about the contribution made by
fi nancial advisors when it comes to spin-offs.
The reason is not hard to fi nd. The operational aspects of
the carve-out are often left to the auditors and their transaction
teams, whose assessments skirt over strategic aspects such as
sustainable growth and operational efficiency.
27
TITLE
CA RV E- OU TS
4. Parent company and subsidiary are bound together

by long-term agreements
Carve-outs have two objectives: to spin off operating units
entirely and to give them independence from the moment
ownership is transferred.
The problem? Supply and service agreements between the
parent company and the subsidiary sometimes remain in place,
removing any pressure to bring the company into line with the
new reality. Planning exits carefully and sticking to a strict
timetable can reduce this danger. Even so, there is a risk that the
parent company will slip into the role of external service provider.
In practice, this is not a role that the parent company will fi nd
easy: It lacks the necessary experience. What is more, long-term
contracts can scare off potential buyers.
5. Expert knowledge is lost

Companies don't just lose plants and machinery during a carve-out,
they also say goodbye to people and their expertise. This can be
a problem. Particularly in countries with few raw materials, fi rms
rely on the knowledge and innovative capacity of their employees.
Their future is in the heads of their staff. Employees maintain
relationships with customers, suppliers, former colleagues and
competitors.
Like mergers and acquisitions, carve-outs can generate
massive insecurity among staff. The greater this insecurity,
the more likely people will consider leaving the company. This is
particularly true in the case of high performers, who have no
difficulty finding new jobs. Staff need to be well informed
New growth from old

Carve-outs demand
sacrifices. But spinning
off a business division
can ultimately help the
company blossom
"Companies don't just
lose plants and machinery

during a CARVE-OUT, they
also say goodbye to people
and their expertise."
about the changes. Indeed, the importance of proper internal
communication prior to a carve-out cannot be overstated.
Credibility and openness on the part of top management are the
key to trust and continuity.
6. Complexity is underestimated
Carve-outs require a profound understanding of the fi nancial
dependencies that exist between the parent and its subsidiary
companies. These dependencies are particularly critical for the
company that is sold or spun off, as the split can threaten its
survival.
The new entity can suddenly fi nd itself cut off from internal
IT systems, logistics structures, IP rights, expert knowledge,
marketing apparatus or supply and delivery channels. Internal
structures are usually built around specific solutions that have
developed over years. Replacing or reconstructing them can be
both difficult and expensive.
7. The operating ecosystem is overlooked

Big corporations tend to have their own ecosystem based on
collaboration. They rely on partnerships between entities that are
separate legally or operationally, for whom the whole is stronger
than the parts. Ignoring these networks makes for unhappy
customers and partners. In the worst-case scenario, it can lead to
serious legal disputes.
Conclusion: Ignore the complexity of carve-outs and risk

paying the price later on.
The truth is that carve-outs are an extremely tricky business. Yet
successful companies need them to manage their portfolio
successfully, even if they are a massive drain on resources. The
keys to success are drawing up a strategy, preparing the ground
early on, planning thoroughly and paying careful attention to the
interests of employees and the operating ecosystem. Experience
can play a major role.
Firms that ignore the complexity risk heavy costs further down
the road. But those that follow the right strategy will reap the
rewards of stable long-term growth and healthy earnings. Lanxess
shows that this is possible. Indeed, the company hopes to double
its operating results again by the year 2018.
28
TITLE
BRIGHTNESS: Unlike many energysaving lamps, LEDs work at full strength

immediately they don't need to
warm up first. The color of the light
red, blue, white, etc. can also be
accurately controlled. That annoyingly
dim, yellowish light from energyefficient lamps? A thing of the past.
LIFETIME: LEDs typically

have a lifetime of up to
50,000 hours, even in difficult
conditions. By comparison,
incandescent light bulbs last
between 1,000 and 4,000
hours, and energy-saving lamps
up to 10,000 hours. Another
advantage of LEDs is that they
don't contain any lead or
mercury, making disposal easier
and protecting the environment.
K NOW LEDGE
Small but powerful.

What exactly are LEDs?
LED
EFFICIENCY: As the incandescent
light bulb disappears from our daily
lives, so does a much-loved unit
of measurement: the watt. In its place
comes the "lumen" a measure of the
amount of light emitted by a lamp on
all sides. An old 60-watt incandescent
light bulb emits around 710 lumens,
or about 12 lumens per watt (12 lm/W).
LEDs emit ten times this amount.
PURCHASE PRICE: An LED as bright

as a traditional 60-watt lamp is
about twenty times more expensive.
One reason is that LEDs require cooling
systems to prevent damage to their
electronic components, which makes
their production more expensive.
However, almost all LEDs pay for
themselves in the medium term thanks
to their lower operating costs.
TECHNOLOGY: LEDs "light-emitting

diodes" are semiconductors whose
resistivity depends on temperature. When
switched on, electrons recombine with
electron holes in the device and generate
light. Because a single diode gives little light,
many LEDs are combined in each device.
POLITICS: Customers are still reluctant to

pay the higher prices associated with
LEDs (they cost up to 20 times as much as
comparable incandescent light bulbs). But EU
policies mean that in the future they will have
little choice. Since 2009, the EU has placed
increasingly tight restrictions on non-energyefficient lamps. And in September 2012, when
the sale of even 25- and 40-watt bulbs was
banned, the lights went out for traditional light
bulbs for all intents and purposes.
POPULARITY: Automobiles are

driving the popularity of LEDs.
In 2007, Volkswagen was the
first manufacturer to fit a seriesproduced vehicle the Audi
R8 with LED headlamps. Now
almost all Audi models are
available with LED technology.
By 2020, the share of LEDs
in the global market for vehicle
lighting should reach 34%,
compared to 12% in 2010.
GROWTH MARKETS: Thanks to

state subsidies, China currently has
the fastest-growing market for LEDs.
European firms are under pressure to
keep up. Research and development
in the area of LEDs requires
expertise in semiconductors, chips
and software. However, the market
leader for memory chips Samsung
is in South Korea.
OUTLOOK: The next generation of LEDs is

already with us: organic LEDs (OLEDs). OLEDs
produce high-quality diffuse light and have even
greater output than LEDs. OLEDs will initially
be used in display systems: they are very thin
and use less energy than LCD displays as
they require no backlighting. By 2020, they will
represent 60% of energy-efficient lighting.
29
TITLE
HR M A NAGEM ENT
YOU CAN NO
LONGER COUNT
ON STABILITY
Timing is everything
Quit while you're
ahead? According to
Tomkos, "continuing
success" is the best time
to think about who
should take over next
HR consultant Thomas Tomkos talks

about departures, management
continuity and when to call it a day
Mr. Tomkos, when was the

last time you had to say goodbye to
something important?
Oh, I've often had to say goodbye to
important things, personal things.
Leaving people is the hardest. But I've
also said goodbye to points of view,
preconceptions or how I do things. You
cannot count on stability anymore
I accept that.
30
Is that easy to do?

Not at all! You're always getting in your
own way. You go on for a little bit and
then you see that you've gotten carried
away and now you have to make a break.
But that doesn't mean that you're
automatically able to do it.
Why do we find change so difficult?
Because it means having to contradict
yourself a bit. You suddenly have to prove

that what you said yesterday is no longer
the case today. We are creatures of habit.
Much of our efficiency is based on routine.
There's a reason that successful companies
have the motto "Never change a winning
strategy". That's not necessarily wrong,
but the point is, what is a winning
strategy? And when does it stop being the
right choice?
Are managers who find it easy to

change course better?
Certainly not! People want their
managers to be predictable. Once they've
adjusted to something, they want it to
stay like that for a while. If managers are
constantly changing their minds and
always distancing themselves from their
supposed principles, they automatically
lose credibility.
So flexibility is a core qualification
for a modern manager?
Yes, they have to be able to be flexible.
But the emphasis here is on "be able to".
They don't always have to be. It's not a
bad idea to critically question changes.
The pressure on companies to move
on from the old way of doing things is
increasing every day.
Managers nowadays have to cope with
extreme levels of complexity.
Developments are not always easy to
comprehend. Uncertainty and volatility
make their lives difficult, and time plays
a major role. Decisions made today
could already be obsolete by tomorrow.
Managers have to be able to deal with this
by moving away from one-dimensional
planning toward evaluating scenarios.
This provides them with more options.
They have to be able to jump into this
way of thinking, although not recklessly.
How many managers are aware of this?
More than before, but it's not something
you can take for granted. The crux of it is,
many young managers have experienced
few major upheavals, or in some cases,
none at all. The only recent ones are the
fall of the Iron Curtain and the bursting
of the dot com bubble and those were
already some time ago. Yet such dramatic
changes are formative experiences. You
need to have them to be able to cope with
uncertainty, change or departures.
On average, board members are
well over 50 years of age. Board
chairmen frequently take over as
head of supervisory boards. Women
are virtually non-existent at the
top levels. If you retire before your
| Ranking |
THE
BIG FIVE
1/
KORN FERRY INTERNATIONAL
680*
2/
EGON ZEHNDER INTERNATIONAL
644
3/
SPENCER STUART
604
4/
HEIDRICK & STRUGGLES
528
5/
RUSSELL REYNOLDS ASSOCIATES
464
*Annual revenue worldwide in USD
million. Source: HSZ Media
time, you're seen either as a failure

or an eccentric. Do we in companies
have more of a "hold on" than a "let
go" mentality?
I personally see top management getting
younger and younger. But when have
you ever seen anyone willingly give
up fun, power and influence? Or someone
who admits that he is the reason for
the company's stagnation and decline?
In middle management, where the
transformation of companies actually
takes place, there is often in such
situations a major reshuffling of people,
which I think goes a bit far. By contrast,

leadership succession at the top of
companies is an extremely difficult topic.
Do companies need a "departure"
culture?
We need a discussion culture that
puts thinking about succession and
transformation on the agenda.
Quitting while you're ahead requires
a quiet strength that we often lack.
We put too much stock in values such
as perseverance and endurance.
You can't just throw in the towel; you
have to stay in the game.
That's ultimately not a bad mindset. Steve
Jobs from Apple wouldn't have become
what he was if he had behaved differently.
Great strides in science and business
are made by people who doggedly
persist in spite of all obstacles. The real
question is: Where and when do
you create stumbling blocks for yourself?
But not finishing something that
you've started is still often seen as
a failing or career suicide.
What's so terrible about managers
realizing that they're heading
in the wrong direction? Isn't true
strength knowing when to
stop chasing unattainable goals?
The critical question here is, what was
really happening? Why did that
person leave? Did he do anything wrong
when considering changing jobs? And
what exactly happened after he left? If
the answers to these questions are
coherent and I have the impression that
the manager has learned something,
then I am willing to back him in the
future. But if, over a short period of time,
somebody gives me three reasons that
sound "too" convincing, then my gut tells
me something's not right.
Some managers thrive on rapid
change.
Oh yes, and rightfully so. They take on
one project after the other, for example
in private equity, and they're extremely
successful. There are also people who
don't last long in personal relationships.
31
TITLE
HR M A NAGEM ENT
But then I wonder, why do they have to

go and get married?
Companies let people go, and people
leave companies. How do you know
when it's the right time?
When you see continuing success.
What do you mean? Failure would
seem to be a better reason.
Sure. But by then it's usually too late. The
best time for the supervisory board to
think about who should take over in top

management is during the success phase.
I'm not saying that there must then
necessarily be a parting of the ways. But I
do think that this is precisely the point
where you have to have a discussion. The
departure will come, sooner or later. By
the way, it doesn't always have to be about
replacing current managers with new
ones. There are also more moderate ways
to make personnel changes, such as by
hiring new people.
THE SUN ALWAYS SHINES

Whatever happens in the economy, the sun almost
always shines for headhunters
> Some industries appear
to lead a charmed
existence. Even in the
darkest of times, they
prosper and thrive. HR
consultants the world
over know exactly what
we're talking about.
Whatever happens in the
economy, the sun almost
always seems to shine on
the glamorous executive
search industry. When
things are going well for
companies, business also
booms for HR consultants.
When things are going
badly, companies more
than ever need good
quality managers who
can weather the storm.
No surprise, then, that in
2010, in the midst of the
financial crisis, when the
world was teetering on
the edge of a global
economic catastrophe,
HR companies recorded
their third-best results
worldwide since records
began, according to data
from the Association
of Executive Search
32
Companies (AESC).
Revenues were up 28.5%,
at around USD 9.6 billion,
just 13% below their alltime high of 2008.
The strongest growth was
seen in the Asia-Pacific
area (up 31%), followed
by North America (27%)
and Europe (17%)
where the UK, Germany
and France led the pack.
Even the beleaguered
financial industry
experienced growth, albeit
at just 0.9%. According to
a study by the Federal
Association of German
Management Consultants
(BDU), companies are
particularly on the lookout
for engineers, designers,
IT directors, IT specialists
and members of control
and supervisory boards.
Some 87% of the HR
consultants surveyed
expect to see particularly
strong demand for middle
managers with 10 to
15 years' experience. Two
factors are driving the
business: demographic
change and the expected

generation shift in business. Money also plays an
important role: Two out
of three managers change
jobs in order to increase
their pay packet and
boost their retirement
funds. But money is by no
means the only reason.
Many managers are
looking for a better work
environment or to escape
from challengers.
Of course, there is no
such thing as a perfect
manager: In the first
place, there is no reliable
way of measuring what
makes a good manager;
and in the second
place, finding the top
people actually means
looking for the most
suitable candidates
currently available on the
market. Plus firms often
overestimate how
attractive they are. What
remains is always a
compromise and sometimes simply a matter of
luck.
Are there other indicators?

Yes. There are indicators that have to do
with the success of the individual, and
others that have to do with the company
as a whole. For instance, when the
business model changes and you have to
ask yourself if your team can really handle
the change. This applies to, say, the brutal
transformation in the media industry,
the radical changes in automotive
manufacturing or a new dawn in the
finance sector. There is another indicator
for the individual: How many new ideas
do you get from your immediate
environment? Or how often and with how
much enthusiasm do your people still
come to you? If you take the time to give
this careful thought, you'll notice
differences over the years. In the end, you
might discover that you're rarely being
inspired anymore. That means something
is seriously wrong.
There's a certain amount of evidence
that companies have an easier time
letting people go than the other way
around, although the reasons are
usually the same. Why is that?
It's difficult for individuals to recognize
when they are at the apex of their
careers and now need to ask themselves if
they're ready and in the right place to
change course.
Is this difficulty explained by the
fear that they can no longer
define themselves by their position
or function, but are instead "just"
a person?
Naturally, nowadays we rate people based
on what they've achieved professionally.
Our jobs define us, unfortunately to the
extent that we hardly ever ask: How much
of that is truly me? And what is left over
if I no longer have this job?
If you could give companies one
piece of advice about letting go, what
would you say?
As an HR consultant, I would say: If
companies could manage to let go of the
idea of recruiting what they know and
start recruiting what they need, then they
would definitely be making progress.
WORKSHOP
14 %
| FACT |
>Intelligent risk management boosts

corporate results by up to 14%.
More about this and other studies
on the following pages.<
WOR K S HOP
COO Insights
Issue 01.2013
WORTH KNOWING
Increase in demand for polyolefin* by region (in millions of tons)
CAGR:
2000-2015e
28
NORTH
AMERICA
31
1.1%
33
22
EUROPE
25
25
0.8%
5
MIDDLE
EAST
16
11.4%
25
27
ASIA
47
5.5%
61
*Indicator for general demand for petrochemical products

Source: Deutsche Bank
2000 2010 2015
| Global petrochemicals |
WHO IS REALLY
BENEFITTING FROM
THE GROWTH IN
THE NEW WORLD?
Rising oil and gas prices, growing demand from emerging economies and strong global
competition are presenting petrochemical companies with new challenges. Long-term reliable
access to feedstock, technologies and global markets is becoming increasingly important. At the
same time, capacity within Europe is becoming less competitive and losing significance.
To remain successful going forward, companies can strengthen their market position in
three ways: expansion, acquisition or cooperation. Our study analyzes the current situation
across the industry and outlines possible solutions for the global petrochemicals market.
http://rbsc.eu/U99RhC
34
COO Insights
Issue 01.2013
*R&D expenditure
(2012)
India
USD 40 bn*
| Innovation Products Engineering |
OUR APPROACH
"Promoting innovations,
repositioning their own products
for greater value, significantly
improving technical efficiency
these things have become a
strategic imperative for our clients."
China
USD 200 bn*
Max Blanchet, Partner at Roland Berger
| Global topics |
EMERGING MARKETS
ARE CHANGING THE GLOBAL
INNOVATION AGENDA
Technical efficiency
Product optimization
Promotion of
innovations
IPE
http://rbsc.eu/VKMYXn
Global innovation and change processes

are increasingly being shaped by emerging
markets. Some Western managers see
these countries simply as exciting new
markets. But as they develop, so will
competition and the pressure to innovate.
The global R&D map is changing
dramatically. New centers of innovation
are emerging. China and India, for
example, already export more R&D services
to the EU than they import from it. The
new competitors are particularly strong

in a new category of products developed
specifically for the lower and middle
market segments and priced accordingly.
This segment, with its simple innovations,
is one of the fastest growing in many
markets and industries. In the latest
publication in our GLOBAL TOPICS
series, we analyze this process and show
how firms can best profit from the
transformation. http://rbsc.eu/PPXR7S
Potential
global savings
| Mastering product
complexity |
Product complexity has increased dramatically. Almost
all industries have to respond to consumers' wishes for
differentiation. The number of different products has more than
doubled in the last 15 years, while product lifecycles have shrunk
by around 25%. Managing complexity has become a key
success factor as firms are forced to cut their production and
distribution costs. Our study presents four different approaches
and shows the savings that can be achieved.
from complexity
management in
different industries
(figures rounded)
Machinery
EUR 46 bn
Chemicals
EUR 39 bn
Pharmaceuticals
EUR 7.5 bn
http://rbsc.eu/RV9sUg
35
WOR K S HOP
WORTH KNOWING
COO Insights
After two difficult years, in which sales

of passenger vehicles dropped by 35%, US
US automotive
supplier industry | automotive suppliers appear to be on the road to
recovery. Our latest study captures the pulse of
the industry, analyzing current developments and looking at the challenges
facing an industry undergoing fundamental change. The study also looks at
how automotive suppliers' stocks are performing most are down, despite the
fact that the industry is in better economic shape now than ever before.
| Rebound of the
| Boosting company performance |
SUPPLY CHAIN RISK CONTROLLING AND WORKING CAPITAL

AS SUCCESS DRIVERS
14 %
http://rbsc.eu/VKNFjt
USD -23 bn
Issue 01.2013
Decline in market
capitalization of the
US automotive supply
industry over the last
20 months
Businesses that actively manage risks in their supply

chain perform 14% better than those that do not. This
is the key finding of a new study carried out by Roland
Berger, the University of Hohenheim and the Swiss
Federal Institute of Technology Zurich, based on an
analysis of 274 manufacturing companies and more
than 20 interviews with top executives. The report also
suggests strategies for directing the drivers of operating
excellence (with regard to corporate policy and
organizational structure) toward processes and their
implementation. http://rbsc.eu/UwZ6GU
Economic uncertainty hinders entrepreneurial activity
Confident
Very confident
62%
55%
54%
52%
52%
47%
23%
21%
21%
15%
23%
Avg. 54%
The percentages
refer to the share of

firms that feel "confident"
or "very confident" with
regard to entrepreneurial
activity in 2013. The
25%
automotive industry
is noticeably uncertain
about short-term
developments; chemicals
and pharmaceuticals
AUTOMOTIVE
much less so
22%
33%
39%
34%
29%
37%
TOTAL
CHEMICALS /
PHARMACEUTICALS
MACHINERY AND
PLANTS
CONSTRUCTION
CONSUMER GOODS
In a joint study, Roland Berger Strategy Consultants

| Operations
Efficiency Radar and the International Controllers Association
(ICV) surveyed more than 100 CFOs and executives at
2013 |
manufacturing companies.
The result is the new Operations Efficiency Radar,
a decision aid for the CFO agenda in 2013. One of the
36
most alarming findings is that, in less than a year,

confidence in the economic situation has fallen even
further. Priorities for the CFO agenda have shifted
accordingly. Further enhancing cost efficiency is now
one of the main goals for 2013, as is improving working
capital management. http://rbsc.eu/SKVLnS
WOR K S HOP
K IOSK
Readers' corner: Recent publications from

Roland Berger Strategy Consultants
think:act
CONTENT PVM
KIOSK
THINKING ABOUT LIMITS
How do companies manage to stay in business for
decades? How do they deal with the growing
complexity in the world around us? And what are
the implications for good management? Three
thoughts on these issues by Burkhard Schwenker,
Chairman of the Supervisory Board of Roland
Berger Strategy Consultants*
First: Corporate management is growing
more complex
When it comes to corporate planning, uncertainty
has become virtually ubiquitous. This has several
implications for good management. It means that
business acumen is once again coming to the fore as
predictability wanes. It means that it is important for
leaders to know where they stand and to be able to make
up their own mind about the future. And it means that
the ability to reflect on things and the willingness to think
in interdisciplinary terms is at a premium. After all, if
we as entrepreneurs want to successfully overcome
uncertainty, we need to look beyond our own backyard
and build bridges between business management
concepts (What is the right way to organize the
company? How do you gain lasting competitive
advantage?), economic concepts (How does growth
work? How is economic policy changing?), sociopolitical
concepts (What values are important? What attitudes
will shape future societies?) and geopolitical concepts
(Where do security risks exist? What significance will
regional alliances have?).
Second: The validity of our traditional
strategy and planning concepts is eroding
We have all learned that the unit cost of a product can
be reduced by 20% to 30% every time the cumulative
production volume is doubled. Or rather, that this is
true when growth rates are high and the business
environment is stable. But what do you do when the rate
of growth shrinks to just 3%? Or when new technology
suddenly enables new production methods? Or when
growth of any sort is so volatile that reliable growth
forecasts are no longer possible? In such circumstances,

what was previously useful cost information is worse
than obsolete: it can actually be dangerous. Of course,
as far as good management is concerned, that doesn't
mean that we should do without modern quantitative
models and concepts altogether. But we must be aware
of the assumptions and limitations that underpin them.
If trends are no longer reliable, numbers will be of limited
use as a basis for planning and decision making. If
numbers cannot help us, we must wave goodbye to
the idea of wanting to quantify every entrepreneurial
decision. And if the people in our companies are
unsettled by complexity, trust in the capabilities of
management will play a pivotal role.
Third: We need a new understanding of what
management means
Communicating a sense of security is very important to
good management. I see org charts, for example,
as symbolic of how we strive for this security. The
challenge today is that no truly responsible manager is
in a position to say how long any org chart will remain
valid. We need something new to replace the security
that we have lost. To my mind, this can only be anchored
in the personality of managers and leaders. Managers
must be able to explain their convictions and how they
see the future. The good news is that this approach once
again makes management more entrepreneurial, more
enterprising. The challenging news is that, on its own,
that's not enough. Managers also need to cultivate
an interdisciplinary mindset if political and social
developments are to be factored into their business
decisions. That's why analytical skills are still paramount:
For all the complexity that surrounds us, identifying
patterns will be as necessary as ever in the future.
*This is an excerpt from the book "On Good

Management. The Corporate Lifecycle.
An essay and interviews with Franz
Fehrenbach, Jrgen Hambrecht, Wolfgang
Reitzle and Alexander Rittweger".
Professor Burkhard Schwenker and Mario
Mller-Dofel, BrunoMedia Verlag,
EUR 19.80 http://rbsc.eu/UwZ6GU
The balancing act

between product
performance and
product cost goes into
the next round. Our
taC issue on product
value management
shows you how you can
make products more
profitable, raise prices,
cut costs and make
your customers happier
at the same time.
think:act STUDY
Innovation
The global race for
the lowest costs
has given way to the
race for the best
innovation. Emerging
countries are investing
more of their GDP in
R&D. And their product innovations are
catching the eye of
customers in industrialized countries, too.
think:act MAGAZINE
Comeback
Our latest edition
of think: act explores
the secrets of a
successful comeback.
No one likes to admit
to setbacks and defeat.
Yet mistakes must
be understood as a
necessary prerequisite
for innovation an
opportunity to do things
better in the future.
37
WOR K S HOP
IN CON V ER SATION
What is life like as a COO?
7 QUESTIONS
FOR ...
brownfield investments in which we
acquire existing factories together with
the associated sales channels. In some
cases, that makes integration much more
difficult than managing new greenfield
plants.
2 / How do you define your role?
EBERHARD SIEGER
COO Fresenius Medical Care
1 / Why does Fresenius Medical Care

need you?
We manufacture dialysis machines and
disposable products around the world.
I oversee the Europe, Middle East and
Latin America region, in which we
operate 20 production facilities with as
many as 2,000 employees each. That's
a big playing field. My job is to coordinate
these activities and manage growth.
One aspect is quickly integrating new
production facilities wherever it makes
sense. We distinguish between three
types of plants. Our "lead plants" drive
innovation. "Contributor plants" operate
close to the market, manufacture
components and cushion each other's
risks. And our "sales booster plants" are
of strategic importance in countries
such as Russia, where local production is
required if you want to gain significant
sales advantages. These plants are often
38
The company expects continuous

improvement in production costs. The
problem is that we have largely exhausted
our economies of scale. Innovation is
therefore the magic word and not only
on the product side. We need to be
always thinking about how we can offset
rising costs with intelligent solutions.
Automation is one way. Using more
technology to ensure quality in mass
production is another. In an ideal world
I wouldn't have to be around and
all the production processes would still
run perfectly.
3 / Does production in Germany

have a future?
Certainly! Our lead plants are in Western
Europe, in Germany, and they will
stay there. Lead plants need to be close
to product development. They also need
highly trained people. Individual
components can naturally come from
elsewhere that's simply a question
of cost benefits. Final assembly can then
take place where the markets are.
Aqueous solutions are a good example.
The bags with the connectors come from
our plant in France, but they are fi lled
at microplants on location. That keeps us
from having to carry water over long
distances.
4 / As COO, do you find yourself caught

between several roles?
Yes, and I hope it stays like that: that's
what I am there for. But I don't just sit in
each role: I am very active. I get around
and communicate at the key interfaces
within the company. There is the interface
with Sales, the interface with Marketing
and Product Development, the interfaces
with external suppliers. In organizing
purchasing, we have just made sure
that we have R&D-savvy buyers on site at
our plant in Schweinfurt people who
can help shape the product and production
technologies.
5 / What takes up most of your time?

Trying to achieve a balance between
decentralized responsibility and the right
dose of central coordination. I naturally
have a lot of day-to-day business to deal
with, too. But I much prefer to look ahead.
In five or ten years' time, what am I going
to be annoyed about not having set in motion today? Ultimately, that's what matters.
6 / How do you use your resources?

My most important resources are my
people. Then having sufficient capital for
investments. I try to fi nd people who
are enthusiastic about their work. Without
such passion, we can never realize our
ambition to be the innovation leader.
7 / What do you stand for?

For delegating responsibility to the people
who have the knowledge to get problems
solved. And for never sweeping problems
under the carpet. In the value chain,
every problem is a gift. It's an opportunity
to continually make things better.
Brief bio:
>Since 2004, Eberhard Sieger has been
responsible for production facilities in the
EMEA/LA region as Executive Vice President
at Fresenius Medical Care (FMC). He studied
Mechanical Engineering at the University
of Stuttgart and in 1985 took up a post as
Research Associate at the Fraunhofer Institute
for Manufacturing Engineering and Automation.
His career in industry began at TRW Chassis
Systems in Dsseldorf. Before joining FMC, he
served as head of spectacle glass production
facilities at Carl Zeiss in Aalen.
I M PR I N T
OU T L O OK
COO INSIGHTS 01.2013

PUBLISHERS Thomas Rinn/Martin Erharter
Roland Berger Strategy Consultants GmbH
HighLight Towers
Mies-van-der-Rohe-Str. 6
D-80807 Munich
Tel.: +49 (0)89 9230-0
COO_Insights@rolandberger.com
RESPONSIBLE FOR CONTENT Dr. Michael Zollenkop (V.i.S.d.P.)

IN ACCORDANCE
WITH GERMAN PRESS LAW
PROJECT MANAGER Dr. Katherine Nlling
EDITORIAL ADVISORY BOARD Dr. Wilfred Aulbur, Carsten Becker, Max Blanchet, Dr. Carsten Bock, Emmanuel Bonnaud,
Bernd Brunke, Georges de Thieulloy, William Downey, Martin Erharter, Dr. Sebastian Durst,
Dr. Mehdi Farhadi, Oliver Herweg, Morris Hosseini, Dr. Jaap Kalkman, Dr. Alexander Keller,
Oliver Knapp, Dr. Thomas Kwasniok, Ambroise Lecat, Per I. Nilsson, Walter Pfeiffer, Thomas
Rinn, Prof. Dr. Burkhard Schwenker, Benno van Dongen, Thomas Wendt, Dr. Michael Zollenkop
DESIGN rb Media Design

COPYRIGHT NOTICE The articles in this magazine are protected by copyright. All rights reserved.
DISCLAIMER The articles in this magazine do not necessarily reflect the opinions of the publishers.
Questions for the editorial team? Interested in studies by Roland Berger Strategy Consultants?
Please e-mail us at: katherine.noelling@rolandberger.com
PHOTO CREDITS Cover: Pascal Barreiro, p. 2: Daniel Horowitz, p. 3: Roland Berger Strategy Consultants,
p. 6, 10: Daniel Horowitz, p. 14, 15: Ralph Zimmermann, p. 16, 20: Pascal Barreiro,
p. 22: iStockphoto, Fotolia, p. 26, 27, 28: Corbis, p. 29: GIPhotoStock, p. 30: Russel Reynolds
Associates, Inc., p. 38: Ralph Zimmermann
Published in January 2013
COMING UP
IN THE
NEXT ISSUE:
THE RAPID INCREASE IN PRICES for rare earths has proven a burden to the
profitability of many companies. The price rise of the 17 rare earth elements has
slowly been losing momentum. But prices remain high a problem mainly for
high-tech companies. High prices are a problem particularly for suppliers of
magnets for e-mobility and wind turbines, LED lamp makers and providers of
batteries and catalytic converters for cars.
How can companies secure the supply of these raw materials?
What strategies are effective?
And what questions remain unanswered?
MATERIAL
BOTTLENECKS
We answer these questions and others in the next issue of COO Insights
"Material bottlenecks".
39
READ THIS
ISSUE ON YOUR
TABLET!
USE THE QR CODE to go directly

to the Roland Berger Kiosk on your
tablet or search for "Roland Berger"
in the App Store. To download the
Kiosk App, click the "Free" button.
You may have to sign in with your
personal iTunes account.

Roland Berger - COO Insights On Transformation - 2013

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COO

DON'T GET STUCK

COO Insights | 01.2013

COO Insights | 01.2013

Thomas Rinn, Partner

Martin Erharter, Partner

Better now than too late

The art of separation

Thomas Tomkos talks about departures

Facts & figures

Essay: Thinking about limits

Book tip: On Good Management. The Corporate Lifecycle.

COO Insights | 01.2013

>Noun (Lat. transformare, "to change

AT FIRST SIGHT it looks simple. A firm's "operating

COO Insights | 01.2013

ery of products, deciding whether to integrate a supplier

"If you want to shape

the future MARKET,

The legendary head of US conglomerate General

"the world's toughest boss". His nickname? Neutron Jack.

can we make the most of the great opportunities that this

SETTING THE BAR THROUGH

If you want to shape the future market, simple

In its most effective form, it is a practical combination of

FROM SHOCK AND DENIAL TO ACCEPTANCE AND INTEGRATION:

> Good management

to leave its former core area of entertainment and enter the

Corporations rarely transform themselves

proper set of tools required for the transformation process,

SEVEN BASIC RULES FOR

1. Align all the transformation processes with a

THE THREE PHASES

defined in Phase One can be

Companies around the globe are searching for a

> Commerzbank hopes to

> Toyota's future focus will be

COO Insights | 01.2013

the supply chain, adjust enterprise resource planning

ENGINEERING THE TRANSFORMATION:

A roadmap is needed to ensure a smooth transformation. This roadmap should be divided up

The three rules

COO Insights | 01.2013

"A firm undergoing transformation

is FRAGILE. Everyone involved

Never put off a

The more levels of

The more extensive

The future is not a

Let's have a look,

Strong leadership has to

When people are ready to, they change.

COO Insights | 01.2013

Anyone who stops learning

We knew what it meant

Bostik chief and

COO Insights | 01.2013

adhesives. The name Bostik is

hygiene products. To serve

and 11 centers of applied

How strong is Total's

TRANSFORMATION THROUGH INNOVATION

Goal To activate growth